calculate contribution margin ratio, breakeven point in amount and breakeven point in units 2) Task 2Q1. Given the following information for Al-Maha Shop Company, answer the following questions:Selling price (per unit)500 R. ONumber of units sold200Variable cost (per unit)300 R. OFixed cost600,000 R. O

Cost-volume-profit (CVP) analysis is a method of cost accounting that looks at the impact that…

Answered: calculate contribution margin ratio,…

Business

Accounting

calculate contribution margin ratio, breakeven point in amount and breakeven point in units

Managerial Accounting: The Cornerstone of Business Decision-Making

7th Edition

ISBN:9781337115773

Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Chapter2: Basic Managerial Accounting Concepts

Section: Chapter Questions

Problem 4MCQ

See similar textbooks

Related questions

Q: Define and explain the contribution margin ratio.

A: Contribution Margin: It is defined as the difference between the sales and the variable cost. In…

Q: The variable cost ratio is calculated as:

A: Particular Sale price per unit Variable cost per unit Variable cost ratio…

Q: The break-even point in units using the weighted-average contribution margin is:

A: 1. Both the Questions are same. 2. Break Even Point is the situation where a business earns no…

Q: Explain the difference between total variable costs and variable costs per unit.

A: Cost can be categorized as variable and fixed costs.

Q: total contribution .margin

A: Total contribution margin = Total sales - Total variable cost

Q: when total contribution margin equals total fixed cost this indicates operating income

A: The contribution margin is described as that amount which is computed after reducing variable costs…

Q: cost which remains constant per unit

A: Variable costs are costs that change according to the level of activity. But, variable cost per unit…

Q: The intercept (straight line) on a graph of the linear cost function represents ....... cost

A: The cost function depicts the costs that will be incurred at various levels of activity Cost…

Q: Assign costs to unitsusing the weighted-averagemethod.

A: Cost: It refers to the economic value incurred by an organization for manufacturing a product or…

Q: What is the company’s contribution margin (CM) ratio?

A: Contribution margin is the amount of sales revenue left after charging variable expenses.…

Q: use in Excel. Proposed Range Name Price_per_Unit Cost per Unit ProfitS_per_Unit Fixed Costs…

A: Answer: The answer for question is given below: A B 1 Price per Unit Price_per_Unit 2…

Q: a. Define and explain contribution margin on a per unit basis.

A: Contribution margin is the amount of sales revenue over and above it's variable costs in the…

Q: Define ( a ) contribution margin, ( b ) contribution marginratio, and ( c ) average contribution…

A: Contribution margin helps management to determine the amount of sales revenue left after considering…

Q: contribution margin ratio

A: The contribution margin is the amount left after subtracting the variable costs from the selling…

Q: VARIABLE COST PER UNIT What is the formula or method for finding the variablel cost per unit?

A: Variable cost is varies with number of units produced. Variable cost per unit is constant and total…

Q: On a CVP graph, the intersection of the sales revenue line and the total cost line is known as the:…

A: CVP stands for Cost-Volume-Profit analysis. It is helpful in determining the change in the total…

Q: Describe the components of contribution margin.

A: Contribution Margin: Contribution Margin refers to the margin of profit expected by the company. The…

Q: Define and distinguish between contribution margin per unit and contribution margin percentage?

A: Contribution margin is the difference between the total revenue and total variable costs of a…

Q: Calculate budgeted contribution margin per unit

A: Formula: Budgeted contribution margin per unit = Budgeted sales price per unit - Budgeted variable…

Q: Explain how the segment margin differs from the contribution margin.

A: Income statement: The financial statement which reports revenues and expenses from business…

Q: Define the term contribution margin ratio.

A: Contribution margin is the measure of ability of the company to cover its variable costs with the…

Q: Define and describe contribution margin per unit.

A: Contribution margin: Contribution margin refers to the process or theory that is used to judge the…

Q: Compute contribution margin using variable com

A: Variable costing is the method of costing, where only the variable costs are assigned to the cost of…

Q: Complete the table below. Units Fixed costs ($) Variable costs ($) Total costs ($) Sales revenue ($)…

A: The first question is answered for you. Please resubmit specifying the question number you want…

Q: Weighted-average cost per unit

A: Inventory: Inventory means to stock it may be raw materials, work-in-process or finished goods Goods…

Q: Explain an example how to calculate contribution margin ratio.

A: Contribution margin ratio: Contribution margin ratio is the difference between the company’s sales…

Q: Distinguish between ( a ) a variable cost, ( b ) a mixed cost, and ( c ) a step-variable cost. Plot…

A: Total cost Total cost refers to the cost which allows the business owners to trace the combined…

Q: following Fixed costs, variable costs, sales, breakeven point value, safety threshold ratio

A: Given in the question: Sales 8500 Raw Materials 2350 Insurance 275 Loan…

Q: h of the following is the format of the income statement that is MOST useful in decision-making?…

A: Solution: For the purpose of decision making, we need to have comparison of relevant revenues and…

Q: Write the equation for the Unit contribution margin?

A: Answer: Cost volume profit analysis estimates how cost changes in both fixed and variable, sales…

Q: Overall Unit Contribution Margin:

Q: The total Cost Per Equivalent Unit will be:

A: Cost per equivalent unit = Total cost incurred / number of equivalent units

Q: 1. Which of the following formulas is used to calculate break-even units? 1. Fixed Costs + Unit…

A: The break even sales are the sales where business earns no profit no loss during the period.

Q: Please explain what is meant by the contribution margin. Also, please provide an example of how the…

A: contribution margin is sales price minus variable cost is called contribution margin, contribution…

Q: Explain income statement under contribution margin format.

A: Contribution margin: It refers to the difference between the selling price per unit of a product and…

Q: When preparing a forecasted contribution margin income statement and you are given the units…

A: Contribution Margin: The process or theory which is used to judge the benefit given by each unit of…

Q: Classify each cost element as either fixed, variable or mixed Calculate: the variable production…

A: Using high low method, variable cost per unit is calculated as follows: Variable cost per unit=…

Q: Min z? reglar unit cost? and suber unit cost?

A: Type A Type B Unit cost Regular fuel 2 units 2 units 1$ Super fuel 2 units 4 units 2$ New…

Q: Define contribution margin, contribution margin per unit, and contribution margin percentage.

A: Contribution Margin: The contribution margin is the excess of selling price over the variable costs…

Q: Requirement 1. For each of the following independent situations, calculate the contribution margin…

A: Formula: Contribution Margin (per unit)= Sales per unit-variable cost per unit Break even points…

Q: Using graphs, show how a semivariable (or mixed) cost behavior pattern can be used to approximate…

Concept explainers

Manufacturing Costs

Manufacturing cost is the total cost of procuring or producing a product. In other words, the manufacturing cost is the cost that an individual or business owner undertakes for the manufacturing of goods.

Question

calculate contribution margin ratio, breakeven point in amount and breakeven point in units

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

This is a popular solution!

SEE SOLUTION Check out a sample Q&A here

Step 1 Meaning

VIEW

Step 2 Calculations

VIEW

Step 3 Conclusion

VIEW

Trending now

This is a popular solution!

Step by step

Solved in 3 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

Similar questions

Product cost concept of product pricing Based on the data presented in Exercise 12-15, assume that Willis Products Inc. uses the product cost concept of applying the cost-plus approach to product pricing. a.Determine the total manufacturing costs and the cost amount per unit for the production and sale of 200,000 units. b.Determine the product cost markup percentage per unit. Round to two decimal place. c.Determine the selling price per unit. Round to the nearest dollar.
Assuming Average cost flow method is used, how much is the ending inventroy and cost of sales, respectively? A. 130,300 and 101,000 B. 101,000 and 130,000 C. 105,000 and 126,300 D. 126,300 and 105,000
Use the data to prepare the cost statement and income statement by use the variable cost . The production capacity ( 8 000 )unit , the seal price ( 2000 ) to unit . Direct materials ( 176000) Direct wages ( 128000 ). Direct expenses ( 132000 ) Indirect expenses ( 132000 ). ( 100 000 v. , 32 000 f. ). Marketing cost v. ( 100 000 )D. Administration cost 60000 D. Indirect marketing f. ( 100 000). The balance of f. g. f. ( 2500 ) unit , and the balance of f. g. l. ( 1000 ) unit . The number of sales unit ( ? ) unit
. Consider the following information: ITEM SALES(Units) SALES VARIABLE COST A 9000 $54000 5.95 B 12000 60000 3.75 C 15000 60000 3.50 D 25000 75000 1.75 Costs of the period are as follows (salaries $45000, rent $10000, depreciation $8000, furniture and computers $24000, raw materials $ 120,000, insurance $5000, periodic maintenance $4000, interest expense $3000, utilities (fixed) $4000, property tax $3000, advertising $9000 (set at the beginning of the year), and new cars $62000). What is the breakeven point for all items? How many units of item A, B, C, & D are needed to breakeven? Calculate the profit of item A.
Assume that the linear cost and revenue models apply. An item costs $13 to make. If fixed costs are $1600 and profits are $5700 when 100 items are made and sold, find the revenue equation. (Let x be the number of items.)R(x) =
According to 3 different types of businesses;(total fixed expense 120,000)X product40 pieces, unit selling price 5000, unit variable expense 2000Y product25 units, unit selling price 1600, unit variable expense 1000Z product100 units, unit selling price 1000, unit variable expense 800 What is the breakeven point amount of the business?
Give what is being asked?1. If total cost and Expenses is P300,000 at breakeven point how much is the total sales?2. The unit selling price of a product is P20, if the total sales for the month is 5,000 units and this is the breakeven point sales volume.Answer question A-C with yes or no.a. Will there be an income in case 6,000 units were sold?b. Will be there be an income in case 4,000 units were sold?.c. If additional units were sold after selling 5,000 units will there be an income?d. How much is the total cost and expenses if 5,000 units were sold?
Calculate the total cost per unit when the total cost is given as 80000 OMR and unit sold are 8000 units Select one: a. 10 OMR b. 80000 OMR c. 800 OMR d. 80 OMR
The Weighted Mean2\ If a manufacturer buys 200 units at OMR 5 per unit from one supplier and 500 units at OMR 3 per unit from another, Find the average cost per unit accurately.
Matamad Inc. Provides you with the following data on its operation for analysis:Unit selling priceP40Variable costs and expenses per unit.P30Fixed cost and expenses per annum.P48,000REQUIRED:a. Contribution margin per unitb. Contribution margin percentagec. BEP sales volume (units)d. BEP peso salese. Peso sales with desired income of P9,000f. Peso sales with desired income P13,000 after 32% income tax
Consider the following information for a given business. Sale revenue =GHS40,000 VC per unit =GHS20 Activity level =1,000 to break even Required: 1. Determine the TFC 2. Express the contribution as a percentage of sale. 3. The company plans to sale 1,500 unit in the next period. What will be the percentage margin of safety (MoS) 4. What margin should the business employ for planning purposes? 5. What total profit should the business expect in order to achieve it's planned sales?
Choose the correct letter of answer In 20x2 the Cranky Processing Company had the following data coming from its income statement (in Pesos): Sales, P1,200,000; Variable costs: (a) Goods sold, P400,000 and (b) S&A Expenses, P100,000; Fixed costs: (a) Factory overhead, P110,000, and S&A Expenses, P80,000. Income tax rate is 15%. Determine the required peso sales to provide an after-tax net income of P150,000. a. P261,765b. P176,471c. P366,471d. P628,235